As a foreign company operating in China, GM must comply with a number of regulatory restrictions. Those include a limit on the size of its stake in Chinese factories and the extent of its partnerships with Chinese companies.

There are 71 auto-making companies in China, but 10 of them failed to sell any cars or trucks in 2012. Obtaining government approval for the purchase of a failing company would be easier than convincing Chinese regulators to allow GM to expand its existing Chinese factories or partnerships.

Other automakers are also looking to build their presence in China, including Volkswagen (PINK:VLKAY), Ford (NYSE:F), Fiat’s (PINK:FIATY) Chrysler, Nissan (PINK:NSANY) and Hyundai.

A GM spokesperson told Bloomberg that the company had no current plans to boost its production capacity in China through acquisitions.